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Variable costs change based on the number of doughnuts sold. The Amazing Donut owns and operates six doughnut outlets in andBegin by completing the table for the original information provided, then complete the table for each case, one at a time. (F

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Answer #1
Revenues Variable Costs Contribution Margin Fixed Costs Budgeted Operating Income
Original $10300000 $7700000 $2600000 $1500000 $1100000
1. $10300000 (10300000-2834000)= 7466000 (2600000*1.09)= 2834000 1500000 1334000
2. $10300000 (10300000-2366000)= 7934000 (2600000*0.91)= 2366000 1500000 866000
3. $10300000 7700000 2600000 (1500000*1.03)= 1545000 1055000
4. $10300000 7700000 2600000 (1500000*0.97)= 1455000 1145000
5. (10300000*1.08)= 11124000 (7700000*1.08)= 8316000 2808000 1500000 1308000
6. (10300000*0.92)= 9476000 (7700000*0.92)= 7084000 2392000 1500000 892000
7. (10300000*1.09)= 11227000 (7700000*1.09)= 8393000 2834000 (1500000*1.09)= 1635000 1199000
8. $10300000 (7700000*0.97)= 7469000 2831000 (1500000*1.03)= 1545000 1286000

Alternative 1 yields the highest budgeted operating income because it has highest contribution margin margin without any increase in fixed costs.

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